Wells Fargo has agreed to pay $56.85 million to settle a class action lawsuit accusing the bank of sending erroneous reports to credit agencies.
The lawsuit accuses the bank of wrongfully reporting mortgage accounts to credit bureaus as “in forbearance” during the pandemic, even though the accounts were current under the CARES Act.
Regulations required the bank to report the mortgages as current and plaintiffs say the bank’s botched data hurt their credit scores, making loans harder to get and raising costs.
The case was filed in San Diego Superior Court, targeting California homeowners whose mortgages were legally current despite entering COVID-19 forbearance on or after March 27th, 2020.
Wells Fargo denies any wrongdoing.
The $56.85 million fund will pay class members automatically, with no forms needed.
Checks will be sent to the last known address after final approval, which is expected in April.
The settlement follows a separate $185 million agreement that Wells Fargo reached last year over claims it placed borrowers into forbearance without their informed consent.
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